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Friday, September 22, 2023


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WorldEuropeEuropean stocks closed flat due to interest concerns

European stocks closed flat due to interest concerns

The Stoxx Europe 600 index closed little changed, with tech stocks down 0.3%.

Britain’s Financial Times 100 index led the losses of other regional indices, with consumer goods companies such as Unilever and export-dependent Reckitt Benckiser Group under pressure as the pound rose by around 0, 9%, in light of expectations that the Bank of England will raise interest rates, after estimates showed it is expected to raise interest rates UK inflation remains high this year .

The data also showed that the eurozone economy entered a technical recession in the first quarter.

Fears that the Federal Reserve (the US central bank) will maintain its monetary policy-tightening stance at its meeting next week, as well as expectations that the European Central Bank will continue to tighten monetary policy have cast a shadow. on stocks.

The sentiment comes after the Bank of Canada raised interest rates to a 22-year high of 4.75% on Wednesday, with markets and analysts immediately pricing in another hike next month.

Forecasts now point to a 74.7% chance that the Fed will ignore an interest rate hike at its June meeting, but raise them in July. For the ECB, traders see a 96.3% chance of a 25 basis point rate hike next week.

Telecom shares fell 1.1%, with Vodafone falling 5.5%, after hitting a one-week high on Wednesday. The stock traded today, Thursday, with no right to dividend distribution.

European real estate storm

In Sweden, shares of SBB Real Estate fell 11.7% after S&P downgraded the stock’s credit rating. Swedish TV also weighed in on the crisis-hit real estate company, reporting that the Swedish government would assess whether the sale of certain real estate owned by the company could have national security implications.

Earlier, “Bloomberg” quoted the company as saying it is currently considering several options, including “selling the company or selling parts of its business or certain assets, in addition to entering into other strategic agreements.” board of directors has ruled out the issue of new shares and their sale.

The move comes three days after the company’s credit rating was downgraded to high risk for the second time, and on Friday evening Fitch Ratings downgraded the Swedish firm’s rating to BB-positive, due to its high level of indebtedness and the imminent maturity of the 2023 and 2024 bonds.

Last week, Daniel Barr, head of Sweden’s financial regulator, issued his starkest warning yet about the unsustainable levels of debt racked up by owners of very commercial property.

“My advice is the need to start thinking about how to reduce the debt,” he added, noting that the sector had accumulated debt during the good years of low interest rates which is difficult to reduce. maintain today, emphasizing raising capital and selling assets, as possible steps to get rid of debt.

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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